Google has agreed to make legally binding changes to its search engine after
an investigation by European competition regulators.

Officials have accepted an offer by Google to clearly label results from its own websites such as Google Plus when they appear in search results, according to The New York Times.

If the deal is finalised it will mean Google will avoid a potentially costly and damaging court case over its alleged abuse of its dominance of the web search market.

It follows a two-year investigation prompted by complaints from rivals including Microsoft and Tripadvisor, the travel website, that Google was unfairly favouring its own products. The European Commission's competition regulators found fault and demanded changes.

Google's proposals are now due to be examined and commented upon by the complainants in the "market testing" phase of the process. If they pass it is reportedly likely changes will be made to the Google search engine in around a month and remain legally binding for five years.

As well as label its own products, Google could also be bound by the agreement to sometimes show results from rivals. Many of the complainants operate in so-called vertical search markets such as price comparison and are concerned by Google expansion into such areas while it dominates general web search. The firm conducts nine out of 10 European web searches.

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Rivals had hoped Google would be forced to make changes to its algorithm to guarantee fairness, but the deal agreed by European officials appears to stop short of that. It would, however, go significanmtly further than a parallel investigation by American redulators that ended earlier this year without imposing any legally-binding obligations on Google.

"If what has been proposed is labeling or a modified form of labeling, frankly that’s a non-starter,” said David Wood, a lawyer for Brussels-based industry group ICOMP, which includes Microsoft. “We haven’t seen the proposals and the commission hasn’t explained them to us. We’re in the dark.”

A deal on web search may not put an end Google's competition problems. FairSearch, a group representing many of the complainants, last week made a new complaint over Google's increasing dominance of the mobile internet via its Android operating system. The European Commission is yet to respond.